25 October 2023

The Congress of South African Trade Unions (COSATU) is deeply disappointed by Treasury’s indifferent responses to the Federation’s proposals to enhance the two pot pension reforms currently before Parliament’s Standing Committee on Finance.

The 2 pot pension reform proposals have been a product of robust and positive engagements between COSATU, Treasury and Parliament since 2020.  They seek to provide financially struggling workers limited early access to their pension funds to enable them to pay debt or respond to other financial hardships without having to resign from their jobs or cash out their entire pension funds.

Whilst we have made much progress and have found each other on many issues, including the new framework for the two pot pension regime, two fundamental areas of disagreement remain.

First is the immediate relief that workers would be able to access when the new law comes into effect.  Initially an amount of R30 000 was agreed to in 2020.  Treasury seemingly oblivious to the devastating impact record high levels of inflation, Eskom tariff, fuel price and repo rate hikes have had on workers, initially proposed R25 000.  Treasury has now proposed a paltry increase to R30 000 in response to COSATU’s request for an amount that would make a more substantial difference to workers of R50 000. 

The two pot pension proposals have been discussed since 2020.  Treasury made a commitment in 2021 to enact these reforms in 2022.  Time and again they have shifted the implementation date.  Once again they are proposing a further additional year to mollify a profit hungry industry and to start in March 2025.

Not only is this painful level of indifference to the real struggles of workers disheartening, but it will also tragically result in countless highly indebted workers simply opting to resign from their jobs and opting to cash out their entire pension funds.  This is precisely what we are seeking to avoid.

COSATU will continue to engage Parliament and Treasury to agree to a more reasonable and fair approach that will see workers receive a more substantial amount of immediate relief when the new law comes into effect and for the two pot pension regime to be implemented in 2024.

Workers are struggling and expect government to assist them in their moment of need.

Issued by COSATU

For further information please contact:

Matthew Parks
Acting National Spokesperson & Parliamentary Coordinator
Cell: 082 785 0687